Skip directly to search

Skip directly to content

 

Physical Automation in the T&L Industry

 
 

Transportation & Logistics Insights | Brian Estep |
03 May 2022

This Transportation & Logistics (T&L) Insights series is based on research by Levvel, who joined the Endava family in 2021. The team surveyed over 500 US-based companies who procure transportation and logistics services internally and externally to get their views on their challenges, needs, and use of digital technology solutions.

While companies often perceive technology innovation to mean things like high-end robotics, artificial intelligence, and fully autonomous vehicles, there are many elements in the supply chain that can be modernized without requiring great effort or cost, while still providing the competitive edge T&L companies are looking for. In this series, we will present current industry challenges and how digital technology can help reduce friction, enhance efficiency, and provide a better experience for businesses and their customers.

THE CURRENT STATE OF PHYSICAL AUTOMATION IN WAREHOUSES AND DISTRIBUTION CENTERS

The mechanization of physical labor solves multiple warehousing, storage, and staffing problems in the T&L industry. Of course, when it comes to physical automation in warehouses and distribution centers (DCs) – as opposed to digital automation which utilizes mainly software and only small hardware components like near-field communication (NFC) chips – costs can seem high at first. But the return on investment (ROI) is even greater.

Worker injuries are at an all-time high. The US Bureau of Labor Statistics found that recordable illness and injury cases more than doubled from a decade ago, reaching 25,000 a year in 2020. The growth of e-commerce means warehousing and storage pressures will only increase. So, it makes sense that facilities are adopting physical automation tools to relieve the strain. Levvel’s research on the current use of automation tools helps to explain how automation tech is being implemented and why industry uptake is so uneven.

Physical automation can refer to many different types of machinery, but the two most common ones currently in use in warehouses and DCs are:

  1. Automated guided vehicles (AGVs): These operate along fixed routes and, at their simplest, include rail-guided carts and conveyors.
  2. Autonomous mobile robots (AMRs): These automated solutions are more adaptive and responsive to the surrounding environment and include palletizing robots, picking, classification, and loading robots, as well as autonomous transportation robots.


Our survey found that investment in these technologies is quite high in the US. Despite the upfront costs, physical automation is relieving human workers of laborious and dangerous tasks on the warehouse floor, as well as helping warehouse and DC managers solve staffing issues.

According to Levvel’s data, most companies have adopted basic forms of physical automation. Around 60% of the 560 transportation and logistics companies surveyed were utilizing AGV technology, specifically conveyors (37%), sortation devices (22%), and visual processors (22%). These tend to involve less upfront investment while still increasing efficiency.

Still, while highly automated companies who implement both AGVs and AMRs face fewer challenges across the board, just 40% have adopted AMR technology, such as palletizing robots (33%), picking robots (30%), or automated transport robots (19%) in addition to AGVs.

THE BENEFITS AND CHALLENGES OF PHYSICAL AUTOMATION

Among the greatest reported benefits of physical automation are fewer incidences of item damage, easier facility maintenance, and fewer safety hazards for workers. All challenges – from loss prevention to demand forecasting – were made easier by higher levels of physical automation.

However, one of the biggest challenges to implementing physical automation tools is cost. The upfront investment in these tools, the time and money it takes to tailor machines like robots to a specific warehouse floor, and ongoing maintenance costs are all important considerations. In some cases, older facilities simply don’t have room for physical automation tools and human staff. But for larger warehouses and DCs, the long-term savings are driving tech upgrades.

Another challenge companies face when adopting high-tech tools is the attraction and retention of staff capable of operating them. While physical automation tools are designed to reduce the physical strain on workers and even solve some staffing challenges, the real issue is the scarcity of skilled workers to manage and maintain these systems. Interestingly, although facilities with high physical automation capabilities reported “finding and retaining talent” as a major pain point for them, companies with only basic physical automation still found talent issues to be more challenging.

In the end, physical automation is a high-cost, high-reward solution that seems initially more fitting for larger warehouses and DCs. And since technology can be adopted piecemeal, each facility can make its own decisions regarding what tools to adopt first to solve their most pressing issues.


Read our other Transportation & Logistics Insights articles to learn more about how technology can help alleviate industry challenges.

Brian Estep

EVP North America & Global TMTR Lead

Brian is one of the founders of Velocity Partners. Following their merger with Endava in 2018, he took on the role of Head of Sales, TMTR. With extensive experience in technology, starting in 2000, and a bachelor’s degree in computer science, Brian has deep knowledge of software systems and lean/agile processes, which allows him to truly understand the needs of customers and design the best solutions for them alongside his team.

 

Related Articles

  • 17 May 2022

    Advantages of a Yard Management System

  • 19 April 2022

    Digital Automation in the T&L Industry

  • 05 April 2022

    Modernizing the Shipping and Cargo Process

  • 22 March 2022

    Current Challenges in the Transportation & Logistics Industry

  • 08 March 2022

    How to Digitize Warehouses and Distribution Centers

 

From This Author

  • 09 August 2022

    hi, I’m Brian Estep

  • 14 June 2022

    The Future of Supply Chain: What’s Next?

  • 31 May 2022

    The Future of Autonomous Vehicles in T&L

Most Popular Articles

Current Challenges in the Transportation & Logistics Industry
 

Transportation & Logistics Insights | Brian Estep | 22 March 2022

Current Challenges in the Transportation & Logistics Industry

AI Art in Game Production – an XDS 2022 Table Discussion
 

AI | Thomas Bedenk | 27 September 2022

AI Art in Game Production – an XDS 2022 Table Discussion

4 Buy Now Pay Later Trends Set to Disrupt the Industry
 

Payments | Annmarie Mahabir | 22 February 2022

4 Buy Now Pay Later Trends Set to Disrupt the Industry

Payments Data Monetisation is Key to Driving Sustainable Growth
 

Payments | Annmarie Mahabir | 20 September 2022

Payments Data Monetisation is Key to Driving Sustainable Growth

Buy or Build? A Game-Changing Question in Insurance
 

Next Gen Insights | Robert Anderson | 12 January 2022

Buy or Build? A Game-Changing Question in Insurance

The New Ways of Issuing Cards
 

Payments | Peter Theunis | 19 July 2022

The New Ways of Issuing Cards

The Metaverse Evolution and Learning from the Games Industry
 

Next Gen Insights | Thomas Bedenk | 30 March 2022

The Metaverse Evolution and Learning from the Games Industry

Top Challenges in Warehouse and Distribution Centers
 

Transportation & Logistics Insights | Brian Estep | 01 March 2022

Top Challenges in Warehouse and Distribution Centers

Buy Now Pay Later: Will Regulation Burst the Bubble?
 

Payments | Annmarie Mahabir | 01 February 2022

Buy Now Pay Later: Will Regulation Burst the Bubble?

 

Archive

  • 27 September 2022

    AI Art in Game Production – an XDS 2022 Table Discussion

  • 20 September 2022

    Payments Data Monetisation is Key to Driving Sustainable Growth

  • 13 September 2022

    Navigating the Healthcare Ecosystem

  • 30 August 2022

    hey y’all! I’m Ashley Grant

  • 23 August 2022

    5 Ways to Fix Your Data Spine in Banking

  • 16 August 2022

    De-risking Digitalisation

  • 09 August 2022

    hi, I’m Brian Estep

  • 02 August 2022

    hey! I’m Lia Rollman

  • 19 July 2022

    The New Ways of Issuing Cards

  • 12 July 2022

    Scores on the Door: Rating Autonomous Vehicles

  • 06 July 2022

    Data-Driven Impact: Don’t Settle for Less

  • 06 July 2022

    We’re in Nottingham – a Q&A on Endava’s New Delivery Centre in the UK

  • 05 July 2022

    hey, I’m Chris Hart

  • 28 June 2022

    Platforms: a Blessing or a Curse?

  • 23 June 2022

    A Payments View on Marketplaces – How to Be(come) Successful

  • 21 June 2022

    Intelligent Commercial Underwriting

  • 14 June 2022

    The Future of Supply Chain: What’s Next?

  • 31 May 2022

    The Future of Autonomous Vehicles in T&L

  • 26 May 2022

    hello! I’m Hannah McCarthy

  • 24 May 2022

    Going Native: Why Cloud-Native Services are Essential

  • 19 May 2022

    How to Tackle Legacy – Breaking Down Walls Between Change and Run

  • 17 May 2022

    Advantages of a Yard Management System

  • 12 May 2022

    Are Phones About to Become the New POS Terminals?

  • 10 May 2022

    The Digital Economy is an Upgrade of Smart Cities and Communities

  • 05 May 2022

    hello! I’m Sumita Davé

  • 03 May 2022

    Physical Automation in the T&L Industry

  • 28 April 2022

    zdravo! I’m Andrej Kotar

  • 26 April 2022

    Open Banking in the US

  • 20 April 2022

    hello! I’m Paul Maguire

  • 19 April 2022

    Digital Automation in the T&L Industry

  • 12 April 2022

    How Do Banks Embrace Embedded Finance – Have the Fintechs Already Won?

  • 06 April 2022

    ESG Data Architecture is a Business Imperative – How to Get Started

  • 05 April 2022

    hi! I am Roy Murphy

  • 05 April 2022

    Modernizing the Shipping and Cargo Process

  • 30 March 2022

    The Metaverse Evolution and Learning from the Games Industry

  • 29 March 2022

    Do Androids Dream of Trading Electric Sheep for Digital Wood? An Introduction to Automated Game Design

  • 23 March 2022

    Real-Time Payments in Australia – Why Corporates Should Get on Board

  • 22 March 2022

    Current Challenges in the Transportation & Logistics Industry

  • 16 March 2022

    bok! I’m Sanja Cvetkovic

  • 15 March 2022

    Rapidly Transforming: Healthtech Trends in 2022

  • 08 March 2022

    How to Digitize Warehouses and Distribution Centers

  • 01 March 2022

    Top Challenges in Warehouse and Distribution Centers

  • 28 February 2022

    Tackling CIB Legacy at its Core

  • 23 February 2022

    salut! I am Isabela Buhai

  • 22 February 2022

    4 Buy Now Pay Later Trends Set to Disrupt the Industry

  • 15 February 2022

    salut! I’m Natalia Ciobanu

  • 14 February 2022

    Product-Led Innovation – a Q&A with Joe Dunleavy

  • 01 February 2022

    Buy Now Pay Later: Will Regulation Burst the Bubble?

  • 31 January 2022

    Innovation Will Spur Ireland’s Race to the Top

  • 28 January 2022

    The Value of Digital and Automation in the Product Returns Process

  • 26 January 2022

    Virtually Disrupted? Keeping Pace with Accelerating Customer Expectations

  • 19 January 2022

    The 3 Big Ps in Modern Insurance: Personalisation, Prediction and Prevention

  • 18 January 2022

    An Introduction to Mobility as a Service in the US

  • 12 January 2022

    Buy or Build? A Game-Changing Question in Insurance

  • 12 January 2022

    hello! I’m Paul Willoughby

  • 11 January 2022

    Payment Service Providers 2.0

  • $name

We are listening

How would you rate your experience with Endava so far?

We would appreciate talking to you about your feedback. Could you share with us your contact details?